Vesuvius issues profit warning as steel production stalls

2019-10-16

Oct. 16, 2019 - Vesuvius Plc as warned that full-year profits could plunge up to 9% as the engineering firm’s profits continue to be battered by weakening global steel production. It said that in July that trading profit had stagnated due to challenging markets in the first half of the year. It said “End markets have continued to deteriorate in the second half of the year, particularly in the Europe and Africa region, and full-year trading profits will fall to between GBP 180 million and GBP 190 million. Steel producers have announced annualized production cuts equivalent to c.4% of 2018 volumes since the end of June. “Over this same period, IHS Markit has lowered its 2019 light vehicle production forecasts and it now expects a 5.6% decline versus 2018.” 

It added “Despite the short-term end-market weakness we are experiencing, we see no structural change to the positive, long-term fundamentals of our end markets and remain confident in our ability to achieve a 12.5% return-on-sales.”